US turns up economic warfare to provoke Russia

With Russia already staggering under the weight of one of its worst financial crises in years, the United States signaled on Tuesday that it would further increase the economic pressure with a new raft of sanctions targeting the Russian defense, energy and banking industries. http://www.nytimes.com/2014/12/17/world/europe/obama-signing-russia-ukraine-sanctions-bill.html?ref=us
President Obama said through a spokesman that he would sign newly passed legislation expanding measures intended to cordon off large Russian state firms from Western financing and technology while also providing $350 million in arms and military equipment to Ukraine as it battles a pro-Russian insurgency in its eastern regions.
The legislation had concerned the president, who has tried not to get too far out in front of European allies on sanctions and resisted sending lethal aid to Ukraine. But Congress passed the bipartisan measure without opposition, making a veto politically untenable, and administration officials said they were satisfied that enough discretion was incorporated into the bill to give the president room to maneuver.
“The president does intend to sign the piece of legislation that was passed by Congress,” said Josh Earnest, the White House press secretary. “But we do have some concerns about that legislation because while it preserves flexibility, it does send a confusing message to our allies because it includes some sanctions language that does not reflect the consultations that are ongoing.”
The new sanctions come as Russia’s economy is reeling from the collapse of the ruble, the increasing flight of capital investment and the specter of recession. Past rounds of sanctions imposed by Mr. Obama and the European Union in response to Russia’s military intervention in Ukraine have contributed to a broader economic
and political instability that has been exacerbated recently by the plunge in the price of oil, on which Russia is deeply dependent.
Mr. Earnest said the turmoil was the result of President Vladimir V. Putin’s own actions. “It’s a sign of the failure of Vladimir Putin’s strategy to try to buck up his country,” Mr. Earnest said. “Right now, he and his country are isolated from the broader international community.”
Russian officials have lashed out in recent days at the prospect of new sanctions. “Russia will not only survive but will come out much stronger,” Sergey V. Lavrov, the foreign minister, told France 24, the television network. “We have been in much worse situations in our history, and every time we have got out of our fix much stronger.”
He said there were “very serious reasons to believe” that the United States was pursuing a strategy of regime change, designed to topple Mr. Putin’s government, and he disparaged American lawmakers. “If you look at U.S. Congress, 80 percent of them have never left the U.S.A., so I’m not surprised about Russophobia in Congress,” Mr. Lavrov said.
Even without Congress, Mr. Obama has already authorized several rounds of sanctions that have largely cut off major Russian banks from American credit markets, blocked the transfer of technology for long-term energy exploration, and frozen the assets of a number of Mr. Putin’s allies and barred them from traveling to the United States. Mr. Obama has been careful to coordinate the measures with European allies, who have been reluctant to escalate the confrontation with Russia because of closer economic ties.
The administration reached out to European officials in recent days to assure them that Mr. Obama would implement the new legislation as part of their joint efforts to keep Mr. Putin from driving a wedge among the Western nations. European officials are talking about imposing new sanctions in the coming days specifically related to Russia’s annexation of Crimea, but they almost certainly would not go as far as the new American legislation contemplates.
Some analysts said Mr. Obama had little choice but to sign the legislation since Russia has continued to violate the terms of a cease-fire negotiated months ago in Minsk, the capital of Belarus.
“Given Russian military resupply of the separatists in Ukraine during the last month, the U.S. had to raise the economic costs to Putin for his outright aggression,” said R. Nicholas Burns, a former diplomat and undersecretary of state under President George W. Bush. “Combined with the collapse of the ruble, sanctions will hit Putin’s government where it is most vulnerable — its very shaky economy.”
But it is not clear how much of the authority granted under the legislation Mr. Obama will invoke. The bill requires the president to impose at least three sanctions from a menu of nine options on Rosoboronexport, the main Russian state arms exporter, and other military companies accused of fostering instability in Ukraine, as well as in Moldova, Georgia and Syria. But it includes a provision allowing him to waive the requirement if he concludes that doing so would be in the nation’s security interest.
The legislation also authorizes the president — but does not require him — to impose sanctions on international companies that invest in certain types of unconventional Russian crude-oil energy projects and to further restrict the export of equipment for use in Russia’s energy sector. And it authorizes the president to bar investment or credit to Gazprom, the Russian state energy giant.
In addition, the legislation authorizes the provision of lethal arms to the Ukraine government, including antitank weapons, tactical surveillance drones and counter-artillery radar. Mr. Obama has resisted sending weaponry to Kiev on the theory that it would only escalate the fighting in eastern Ukraine, so it is not clear whether he will follow through on the authorization.
The measure went beyond only penalties to authorize $10 million in each of the next three fiscal years to counter Russian propaganda in the former Soviet Union and prioritize Russian-language broadcasting in Ukraine, Moldova and Georgia. And it authorized $20 million in each of the next three years to promote democracy, independent news media, uncensored Internet access and anticorruption efforts in Russia.
But under pressure from the Obama administration, lawmakers removed elements that would have tied the president’s hands, including a provision that would have barred lifting sanctions until Russia was not only out of Ukraine but Moldova and Georgia, too, where lingering conflicts are not likely to be resolved soon.
“President Putin bears responsibility for any outcomes that flow from his actions and breach of the international order,” said Senator Robert Menendez, Democrat of New Jersey, the chairman of the Foreign Relations Committee, who pushed for the sanctions along with the panel’s senior Republican, Senator Bob
Corker of Tennessee. “The United States Congress stands with Ukraine in the face of
Russian aggression,” Mr. Menendez said.